The marketing term line extension refers to the expansion of an existing product line under an already established brand name with the goal of reaching a broader customer base that isn't presently tapped into with the existing product or products. This line extension attempts to reach a more diverse range of customers based on price preferences, quality preferences, functionality, and/or individual taste preferences. A company may decide to extend it’s line within a single product such as coming out with a more diversified line of shampoo products, or it may decide to diversify it’s product line through a brand extension by offering soaps, conditioners, moisturizers, and make up products through brand extension under a single brand name. Both line and brand extensions often appeal to upper management instead of launching new prodcucts under new brand names. They seem like a logical option and are definitely cheaper, but they are not without their risks. 

 

Brand extensions are similar to line extensions in that they use an existing brand to launch a new product in order to lower promotional costs and attract customers. The difference is that line extension focuses on expanding an existing product line under a single brand name ex. Arizona iced tea and their 133 different types of iced tea. Brand extension uses an existing and recognized brand to launch a new, sometimes unrelated product line. Depending on how it is done, brand extension can be riskier than line extension and may end up damaging the brand. An example of a successful brand extension can be seen by looking at Tide, a division of proctor and gamble, who launched the Tide to go stain removing pen. Tide is best known for their laundry detergent, but extended their brand to convenient stain removing; a safe and successful brand extension.

 

A popular historical example of a line extension can be seen by looking at Coca Cola. They originally just had Coke, but in 1982 they not only released diet coke, but tested cherry coke and vanilla coke on audiences at various local fairs. The year 1982 was a very important year for the company as they not only decided to release diet coke as a line extension but to continue developing other flavors that they would release later; cherry coke in 1985 and vanilla coke in 2002. Coca cola continued this line extension trend in 1983 when they released their caffeine free coke. Line extension can be a very effective way to gain new customers and incease profitability due to a reduction in promotional costs as a result of piggy backing new products off of an already established and accepted brand.